1.(C) Summary: During a February 11 tea with the Ambassador, civil society activists provided their views on the current state of political liberalization. Hossam Bahgat, Executive Director of the Egyptian Initiative for Personal Rights noted that the progress set in motion between 2003 and 2005 currently manifests itself in continuing demonstrations, strikes and protests. He criticized the stifling role of State Security (SSIS) in public life. Hisham Kassem, president of the Egyptian Organization for Human Rights, cautioned that observers should not expect President Mubarak to make any significant concessions on political reform. Kassem described young bloggers as a powerful force for change. Engi Haddad, president of the Afro-Egyptian Organization for Human Rights, suggested that fighting corruption will drive a wedge between the ruling party and the business elite. Haddad described her organization's plans to try to block a potential GOE privatization vouchers plan, out of concerns over corruption. End summary. --------------------------------------------- ---------- Some Bright Spots Amidst Infighting and SSIS Harassment --------------------------------------------- ----------

2.(C) Hossam Bahgat hopes for a return to the 2003-5 period when the GOE opened the political space to allow the growth of independent media and public expression. Bahgat asserted that this opening still influences the current political scene, and that recent restrictions have not reversed the progress. He cited the steady stream of demonstrations and protests throughout Egypt as evidence of political change, saying that such a landscape would not have been possible ten years ago. He also cited the December 2008 establishment of the real estate tax collectors union, Egypt's first independent labor union, as a positive step. Bahgat noted that the new channels for political engagement are mostly secular, while Islamist forces had formerly occupied this space. He rejected a return to the political "stagnation" that dominated the country before 2003.

3.(C) Bahgat criticized State Security's influence over the bureaucracy and civil society, asserting that SSIS controls faculty appointments and NGO travel to international conferences. He described the bureaucracy as a cover for the SSIS officers who create government policy from behind the scenes. Bahgat asserted that "real reform" will not be possible until there is a GOE political decision to scale back SSIS' role. He said that in order to maintain leverage over civil society, the government has written the penal code so that any NGO breaks several laws each day. Bahgat claimed activists know that the GOE could prosecute them at will if they cross political red-lines.

4.(C) Hisham Kassem, president of the Egyptian Organization for Human Rights and founder of the independent daily "Al-Masry Al-Youm," said that real political change will only come when Mubarak exits the stage. Kassem cautioned that Mubarak will not make any significant concessions on democratic freedoms. He criticized the quasi-governmental National Council for Human Rights for not being particularly active, and characterized the Egyptian human rights community as damaged by in-fighting. Kassem plans to step down as president of the Egyptian Organization for Human Rights at the end of 2009, but he will remain on the board.

5.(C) Kassem predicted that information technology would change the Egyptian media over the next ten years, noting that there will soon be 20 million web-enabled cell phone users able to receive instant news reports. He described young bloggers as a "major force for change," and commented that many political figures are trying to "pounce on them" to recruit them into different political parties. He praised Egyptian political debates on Facebook during the Gaza crisis as "healthy." Kassem characterized 2005 as "the best year of our lives," but lamented that the GOE had crushed the political "uprising" that began at that time.

6.(C) Kassem asserted that State Security undermines civil society by, for example, preventing NGOs from leasing office space. According to Kssem, although the GOE political leadership give SSIS a free hand to beat demonstrators, State Scurity needs explicit orders to move against a pominent activist. Kassem asserted that there are sme limits on SSIS power by recounting how an SSI officer tried CAIRO 00000325 002 OF 002 to observe the February 7 Administrative Court ruling that named an Ayman Nour ally the head of the opposition Al-Ghad party (reftel). Kassem said that when the officer told the judge he was attending the court session as a representative of the fictional "Dahaliya Party" ("Interior Party"), the judge promptly ejected him. --------------------------------------- Corruption as a Growing Political Issue ---------------------------------------

7.(C) Engi Haddad, President of the Afro-Egyptian Organization for Human Rights, cited corruption as a major impediment to reform. She contended that fighting corruption would drive a wedge between the ruling National Democratic Party and the business elite. She described anti-corruption work as "even riskier" than opposition politics, recounting that SSIS told her directly they cannot "cover her" on anti-corruption work, meaning that she is exposed to potential political retribution. Haddad also criticized the lack of freedom of information, recounting how she recently attended a board meeting of the Suez Canal Bank as a shareholder, but was unable to obtain basic information about the bank's finances.

8.(C) Haddad's organization is trying to block the government's potential privatization vouchers plan, out of concern over corruption. Under the proposed plan, which is still under discussion in parliament, the government would privatize state-run companies by distributing ownership vouchers to all citizens over the age of 18. Haddad expressed concern that the distribution system for the vouchers would be based on inaccurate lists, and that private interests could take advantage of citizens by buying up blocs of vouchers at below-market prices. Her organization has prepared a legal case arguing that the state-run companies are "public" assets, not "government" property, and that therefore the GOE does not have the right to distribute the vouchers. Haddad also noted that she is speaking to business people about creating a fund to potentially buy vouchers at a fair price to prevent predatory financiers from purchasing the vouchers at below-market prices.

9.(C) Haddad called for activists to build apolitical civil society organizations, focusing on development and charity to claim this space from the Muslim Brotherhood. She noted that a group of young American University in Cairo graduates have been running a program for the past three years providing micro-loans to low-income businesspeople. Haddad described how Egyptian activists support themselves either through business activities, or by competing for donations, which creates tensions between NGOs. She explained how SSIS tries to intimidate her by disclosing that they know the details of her personal life. SCOBEY